Al Turi Landfill, Inc. - Ruling, September 23, 2002
Ruling, September 23, 2002
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
the Application of
AL TURI LANDFILL, INC.,
to renew its permit to operate a solid waste landfill in the Town of Goshen, Orange County.
RULINGS OF THE
ADMINISTRATIVE LAW JUDGE ON PARTY
STATUS AND ISSUES
DEC Application No. 3-3330-00002/00021-0
BACKGROUND AND BRIEF PROJECT DESCRIPTION
Al Turi Landfill, Inc. ("Al Turi") is seeking renewal of its Department permit to operate its existing municipal solid waste landfill located along New York State Route 17M at the intersection of Hartley Road in the Town of Goshen, Orange County. Al Turi proposes to dispose of waste in a 7.4-acre area in the southeast portion of the landfill over the next 3 to 14 years. Al Turi anticipates accepting waste at the rate of 50 to 250 tons per week, while maintaining the existing permit condition allowing it to accept up to 8,400 tons of waste per week. Al Turi's current permit has an expiration date of September 23, 2002. However, because a timely and sufficient application was made for the permit's renewal, the current permit does not expire until the application has been finally determined by the Department, or, in case the application is denied or the terms of any new permit are limited, until the last day for seeking review of the Department's decision or a later date fixed by order of a reviewing court, pursuant to Section 401(2) of the State Administrative Procedures Act.
The permit requiring renewal is one to operate a solid waste management facility, issued pursuant to Title 7 of Article 27 of the Environmental Conservation Law ("ECL") and Part 360 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR Part 360"). The permit renewal is a Type II action pursuant to 6 NYCRR 617.5(c)(26) because there would be no material change in permit conditions or the scope of permitted activities. Pursuant to 6 NYCRR 617.5(c)(26), because the renewal is a Type II action, no environmental assessments or determinations of significance are required, and no environmental impact statement has been prepared.
Al Turi's application for permit renewal (Issues Conference Exhibits No. 6 - 10) was received by Department Staff on March 26, 2002. On April 9, 2002, pursuant to 6 NYCRR 621.13(d), Department Staff issued a letter to Al Turi (Exhibit No. 11) providing notice of its intent to deny the permit renewal on three grounds:
(1) Al Turi is unfit to be granted a permit renewal, in light of a prior decision by the Department Commissioner denying Al Turi's request for a permit to expand the landfill.
(2) The renewal application does not comply with a condition of the current permit allowing for permit renewal only if waste disposal would occur over double composite lined areas of the landfill.
(3) Continued operation of the landfill at the level proposed by Al Turi would result in an environmentally unacceptable delay of the installation of final cover.
On May 8, 2002, counsel for Al Turi submitted a letter to Department Staff (Exhibit No. 12) requesting a hearing under 6 NYCRR 621.13(d) and urging the Department to reconsider its decision to deny the permit renewal. After the matter's referral to the Department's Office of Hearings and Mediation Services, I was assigned to set up and conduct the requested hearing.
LEGISLATIVE PUBLIC HEARING
A Notice of Public Hearing, dated July 11, 2002, was published in the Department's on-line Environmental Notice Bulletin on July 17, 2002, and as a legal notice in The Middletown Times Herald-Record on July 16, 2002.
As announced in the notice, a legislative hearing to receive unsworn public statements about the permit renewal was held during the evening of August 13, 2002, in the auditorium of the C.J. Hooker Middle School, 41 Lincoln Avenue, Goshen. At least 100 people attended and 32 spoke, none of them in favor of the permit renewal. Almost all the speakers were against continuation of the landfill either because they consider it to be an environmental hazard, or because they consider Al Turi to be an unfit operator in light of past felony convictions of its three principals and the corporation itself. Many speakers complained of odors and water pollution that they attributed to the landfill's operation. Some speakers said that, because the landfill is so close to its permitted capacity, it would serve no useful purpose to renew its permit. Many speakers expressed an urgency about closing the landfill, arguing that solid waste landfilling at the Al Turi site has been ongoing since 1968, and that Goshen residents have put upwith the associated problems long enough.
Edward A. Diana, the Orange County Executive, urged that the closure and capping of the Al Turi landfill begin in September 2002, ushering in a new, landfill-free era for Goshen. Goshen Village Mayor Marcia Mattheus commended Department Staff for its notice of intent to deny the permit renewal, urging the Department to "stand firm" in its decision. Bonnie Kraham, an Orange County legislator representing parts of the Town of Goshen, the Town of Wallkill and the City of Middletown, thanked the Department for previously denying Al Turi's application to expand the landfill, and said closing the landfill is the unifying, overarching issue among the people in her district who live near it. Maureen Quattrini, president of the Goshen Chamber of Commerce, expressed that organization's view that closing the landfill would begin to restore the quality of life in a community described as being "at risk far too long."
Letters commending Department Staff's position in this matter were submitted by Congressmen Benjamin A. Gilman (20th District, New York) and Maurice D. Hinchey (26th District, New York). Congressman Gilman strongly encouraged the Department to continue its efforts to fully assure that local residents are protected from further deleterious impacts emanating from the site. Congressman Hinchey, while acknowledging the landfill is not in his district, said that extending Al Turi's operating permit would exacerbate a situation in which leachate and stormwater from the landfill may be entering the Wallkill River, adjacent to the site, and affecting his downstream constituents who use the river for fishing, recreation and irrigation of gardens and farms. Congressman Hinchey also said that during his tenure in the 1980's as chairman of the New York State Assembly's Environmental Conservation Committee, that committee discovered that hazardous waste and toxic materials had routinely been illegally disposed of at the Al Turi landfill; in fact, a portion of the site outside the area of current operations was later designated a Class 2 inactive hazardous waste disposal site. According to Congressman Hinchey, Al Turi's closure would allow installation of a final cover which will reduce and prevent further contamination of water resources including the Wallkill River and a nearby aquifer.
Also going on record against the permit renewal was Orange County legislator Spencer McLaughlin, chairman of the county legislature's physical services committee, who noted the county's "bitter" experience of operating its own landfill near the Al Turi site, which he said resulted in river and aquifer pollution. Frank and Roberta Gillis, representatives of Jesus Christ Triumphant Church, said that the landfill, directly across from the church on Route 17M, had prevented the church's expansion and now threatened its very existence. They said that the church moved to its present location 45 years ago, before the landfill was built, and has been a "direct target" of the landfill for the last 30 years, to the point that the church has had to curtail various activities due to nuisance conditions arising from the landfill's operation.
Speakers against the landfill included representatives of Citizens Who Care and Orange Environment, two citizens' groups active in monitoring the activities of the landfill and its operators. Because both groups filed for party status to adjudicate issues bearing on the permit renewal, their positions are addressed below in relation to the issues conference, in which both groups participated through counsel.
As announced in the hearing notice, an issues conference was held on August 19, 2002, at the C.J. Hooker Middle School in Goshen. The purpose of the conference was to determine what issues bearing on permit issuance would require adjudication and whether two petitioners for party status would be allowed to participate in an adjudicatory hearing, should one be required. Participants at the issues conference were Al Turi, Department Staff, and two prospective intervenor groups, Citizens Who Care and Orange Environment.
Al Turi was represented by Christopher McKenzie, Esq., of Beveridge & Diamond, P.C., in New York City.
Department Staff was represented by Jonah Triebwasser, Esq., from the Department's Region 3 office in New Paltz, New York.
Citizens Who Care was represented by Gary Abraham, Esq., of Allegany, New York.
Orange Environment was represented by Scott A. Thornton, Esq., of Thornton, Bergstein & Ullrich, LLP, of Chester, New York.
The conference was transcribed by a court reporter and various documents were marked as exhibits. The conference record has been supplemented by written submissions on certain points, as authorized by the ALJ in a memorandum dated August 21, 2002. The final submissions were received on September 3, 2002, and the conference record closed on that date.
ISSUES FOR ADJUDICATION
The Department's permit hearing procedures provide that an issue is adjudicable if it relates to a matter cited by Department Staff as a basis to deny a permit and is contested by the applicant. [6 NYCRR 624.4(c)(1)(ii)]. As noted above, Department Staff, in a letter dated April 9, 2002, provided three different grounds for not renewing Al Turi's landfill permit. Each of these grounds is challenged by Al Turi, and for that reason alone, the issues raised by Staff's letter require adjudication to determine if permit renewal is appropriate.
Of the three grounds cited by Department Staff, the first, concerning Al Turi's fitness, raises issues on which the two prospective intervenor groups also want to be heard. Orange Environment seeks amicus status on legal and policy issues involving the Department's authority to deny permit renewal on fitness grounds, including not only the criminal convictions of the facility's ownership, but the environmental compliance record of the facility itself. Citizens Who Care also seeks amicus status on the fitness issue, seeking to broaden the issue beyond matters cited in the Department's 1999 decision denying Al Turi's application to expand the landfill. Citizens Who Care proposes to offer new information on the conduct of Al Turi's principals since the 1999 decision, as well as previously unconsidered information that is alleged to link Al Turi's principals to environmental violations by other entities in which they have had a substantial interest.
Issue No. 1: Fitness of the Applicant
An issue exists as to whether Al Turi is suitably fit to be granted a renewal of its landfill permit. This issue concerns matters previously addressed in an April 15, 1999 Commissioner's decision denying Al Turi's application to expand the landfill. Department Staff asserts that, in light of the 1999 decision denying the expansion on fitness grounds, Al Turi is collaterally estopped from relitigating the issue of whether it is fit to hold a DEC permit. According to Staff, no further fact-finding is necessary, and it would be a waste of resources to relitigate the fitness issue in any fashion. The prospective intervenors agree with Department Staff; Al Turi does not.
Al Turi maintains that Department Staff's determination not to renew its permit is arbitrary and capricious, unsupported by substantial evidence, and in violation of its constitutional rights of due process and equal protection of law, since, according to Al Turi, it departs from past Department precedents granting permits to others with worse fitness records. (These same arguments have been raised in a court challenge Al Turi has made with regard to the Department's 1999 decision denying it permission to expand.)
Al Turi argues that significant changes in factual circumstances dictate that the conclusions of the 1999 decision be given no weight in the Department's decision on the renewal application. Al Turi says that to the extent the Department wants to consider fitness as a basis to deny the permit renewal, it must take a fresh look at the issue and cannot merely rely on the state of affairs that existed when the Department denied permission for the landfill's expansion. According to Al Turi, the issues of fitness related to prior criminal conduct and environmental compliance history are not suitable for the application of collateral estoppel because, to consider these issues, the Department is bound by law and its own policy to analyze factors that necessarily will change over time. These factors, Al Turi says, include the age of its violations as well as evidence of rehabilitation and good conduct since the violations occurred.
The issue of collateral estoppel concerns the April 15, 1999 decision of the Commissioner denying Al Turi permission to expand the Goshen landfill. That project was to have involved a lateral expansion into an 18-acre area adjacent to the southeast boundary of the existing landfill footprint, and a 17-acre vertical expansion above the eastern part of the landfill, including previously closed sections, which would have increased the approved elevation from 525 to 650 feet above sea level. The expansion application was noticed as complete by Department Staff on December 10, 1997, and subsequently referred to my office for hearing. After an issues conference, in rulings dated June 19, 1998, I said an issue existed as to whether the Applicant was suitably fit to receive the landfill expansion permit. The issue, I said, would have to be considered in light of three considerations: (1) the felony convictions of Al Turi, its three principals, and several companies in which the principals had major interests; (2) an environmental enforcement history represented by consent orders and other settlement documents; and (3) a record of landfill inspection reports for the period from 1993 forward. On September 14, 1998, the Commissioner issued an interim decision denying Al Turi's appeal of my ruling, resulting in formal adjudication of the fitness issue in a hearing involving Al Turi, Department Staff, and Orange Environment, which had sought and received full party status.
At the conclusion of the hearing, in a hearing report dated February 12, 1999, I recommended that the permit to expand the Al Turi landfill be denied, concluding that Al Turi was unfit to receive the permit. I wrote that the lack of fitness was demonstrated by the criminal records of the corporation itself, its three principals (Nicholas Milo, Thomas Milo, and Louis Corso, each of whom has a one-third ownership interest in Al Turi), and their affiliates. I found there was a direct relationship between the criminal offenses outlined in my report and the fitness of Al Turi to operate a solid waste management facility. Also, I found that issuance of the expansion permit would involve an unreasonable risk to the welfare of the general public.
My report was issued as a recommended decision for the parties' comments and subsequently adopted in full by the Commissioner in the April 15, 1999 decision denying the expansion application. In the decision, the Commissioner recapitulated the criminal history of Al Turi, its three principals, and their affiliates, as follows:
- [T]he Applicant and its three principal shareholders Nicholas Milo, Thomas Milo and Louis Corso, (each have a one-third ownership interest) pled guilty in September 1997 in the U.S. District Court for the Southern District of New York to felony charges related principally to the filing of false tax returns. The Applicant pled guilty to the crime of conspiracy, admitting that between 1983 and 1988, the Applicant and others "conspired willfully and knowingly and unlawfully to defraud the United States" by issuing checks to J&T Recycling Corp., an entity owned solely by Thomas Milo, for non-existent equipment rentals. On March 30, 1998, the Applicant was placed on probation until the end of July 2000 and fined $910,000.
- The Applicant's three sole shareholders were also immersed in the tax fraud scheme. Nicholas Milo pled guilty to conspiracy to defraud the IRS and to commit extortion for activities between 1984 and 1988 involving unlawful payments falsely recorded as equipment rental income from another carter to preclude competition. He was sentenced to a 41 month prison term to be followed by two years of supervised release, and ordered to make restitution to the United States Internal Revenue Service (IRS) in the amount of $3,099,695. Thomas Milo pled guilty to conspiracy to commit mail fraud and to defraud the IRS for activities between 1981 and 1987 involving a fictitious invoice-payment scheme. He received a 36 month sentence to be followed by three years of supervised release, and ordered to make restitution totaling nearly $3.2 million to the IRS and Westchester County. Louis Corso pled guilty to aiding and abetting in the preparation and presentation of a fraudulent and false tax return. The crime involved a $120,000 fraudulent deduction in a 1989 tax return for a company in which he had a 50% interest. Mr. Corso received a seven month prison sentence to be followed by one year of supervised release, and a $30,000 fine.
- The Applicant's criminal history is also reflected in the September 1997 guilty pleas entered by several companies whose major shareholders were also the stockholders of the Applicant. Those companies included, inter alia, Suburban Carting Corp. ("Suburban"), whose sole shareholder was Thomas Milo. Suburban pled guilty to conspiracy charges for tax law violations between 1960 and 1993, and also admitted to offering a bribe to a labor official and accepting checks on fictitious invoices. Suburban further admitted that its acting officials knew its conduct was unlawful. Suburban received a five year probation term, was fined $780,000, and was ordered to make restitution totaling $885,304. Eight other corporate entities, either fully or partly owned by the Applicant's shareholders, also pled guilty to United States tax law related charges in the September 1997 proceeding. [Commissioner's Decision, pages 2 and 3.]
The Commissioner also confirmed my findings of problems related to Al Turi's environmental compliance record, specifically calling attention to nuisance odors that had been generated on a recurrent basis despite and even in the presence of on-site monitoring and inspections by Department Staff. The Commissioner found that the aggravating factor of environmental compliance, coupled with the aforementioned crimes, were sufficient to conclude that permitting the expansion would pose an "unacceptable risk." [Commissioner's Decision, page 6.]
The Commissioner's decision denying the landfill expansion was appealed by Al Turi in a proceeding brought pursuant to Article 78 of the Civil Practice Law and Rules. In a decision dated December 3, 2001, the denial was affirmed by the Appellate Division of State Supreme Court, Second Department [Al Turi Landfill, Inc., v. New York State Dept. of Environmental Conservation, 289 A.D.2d 231, 735 N.Y.S.2d 61]. The court found that there was sufficient evidence in the record to support the finding that Al Turi was unsuitable to hold the requested permit. The court held that the prior criminal acts of Al Turi and its principals, involving tax fraud, accepting checks on fictitious invoices, and mail fraud were directly related to the duties and responsibilities of a permit holder, including accurate self-reporting, effective self-policing, and honest self-reporting to government, and thus, denial of the permit based upon such criminal conduct did not amount to unfair discrimination.
The decision of the Appellate Division is now under review by the New York State Court of Appeals, which heard oral argument from the parties on September 12, 2002.
Department Staff maintained at the issues conference that in light of the Commissioner's decision denying the permit expansion, and the Appellate Division's dismissal of Al Turi's challenge to that decision, Al Turi is collaterally estopped from again attempting to convince the Department that it is fit to hold one of the agency's permits. As Department Staff argues in its post-conference brief, collateral estopppel stands for "the sound principle that, where it can be fairly said that a party has had a full opportunity to litigate a particular issue, he cannot reasonably demand a second one." Siegel, New York Practice, Section 457 (3d Ed. 1999) [citing Schwartz v. Public Administrator, 24 N.Y.2d 65, 69, 298 N.Y.S.2d 955, 958 (1969)]. The proponent of collateral estoppel bears the burden of showing that the issue to be determined in the later proceeding is identical to that determined in the prior proceeding, while the opponent of collateral estoppel bears the burden of proving that it was denied the requisite full and fair opportunity to litigate the issue in the prior action.
Department Staff contend that it would be wasteful to relitigate Al Turi's fitness to hold a permit if that fitness can be determined anew based on the record developed in the prior hearing on the landfill expansion, the Commissioner's denial of the expansion permit, and the Appellate Division's dismissal of Al Turi's challenge to the Commissioner's decision. However, though I share Staff's concern about efficiency, I conclude that the fitness issue cannot be fully resolved with reference to the prior proceeding, but needs to be revisited in light of certain changed factual circumstances that are highlighted by Al Turi in its post-conference brief. These changed circumstances derive from the fact that more than three years have passed since the Commissioner issued his decision on the landfill expansion. The passage of time has shifted the window through which Al Turi's fitness must be examined, pursuant to both the Corrections Law (in relation to the criminal convictions) and the Department's own Enforcement Guidance Memorandum ("EGM" Number II.24, issued 8/8/91, revised 2/93) governing record of compliance review.
With respect to the criminal matters outlined above, the fitness issue must be adjudicated in light of Correction Law Sections 752 and 753. Section 752 prohibits permit denial by reason of previous convictions for one or more criminal offenses, or by reason of a finding of lack of "good moral character" based on such convictions, unless: (1) there is a direct relationship between one or more of the previous criminal offenses and the permit sought; or (2) the issuance of the permit would involve "an unreasonable risk to property or to the safety or welfare of specific individuals or the general public."
In making its permitting decision, the agency must consider certain factors under Correction Law Section 753(1) to which the passage of time is relevant. These include "the time which has elapsed since the occurrence of the criminal offenses" and "any information produced in regard to the person's rehabilitation and good conduct." One may take official notice of the amount of time that has passed since the criminal offenses occurred, but the issues of rehabilitation and good conduct require some factual development.
On the issue of rehabilitation, Al Turi argues that, since the 1999 Commissioner's decision, all three of Al Turi's principals have fully served their periods of detention. On the issue of good conduct, Al Turi argues that, since the 1999 Commissioner's decision, the landfill has maintained a "clean" and "exemplary" record, that the Department has issued no notices of violation, and that there has been no recurrence of the operating problems (such as those with odors) that were noted in my previous hearing report. Al Turi says it could present evidence of improvements undertaken by landfill management that would help assure continued compliance under terms of a renewal permit.
None of the criminal offenses outlined in my prior hearing report involve events more recent than 1993, though guilty pleas were not entered until 1997. The passage of three years since the 1999 Commissioner's decision puts these crimes even deeper into the past, and opens questions as to more recent conduct by Al Turi and its principals. A record needs to be developed about the activities of Al Turi's three principals in the last three years, including the extent of their involvement in the landfill's operation. (According to Al Turi's counsel, of the three Al Turi principals, only Mr. Corso is involved at all.) Also required is some confirmation of claims regarding the landfill's operating record in the period since the last hearing. Relevant evidence would include Department Staff's inspection reports as well as reports documenting the amount of waste received at the landfill since 1999, since Department Staff contends that recent good compliance may be attributed largely to a diminished level of operations over the last several years.
Record of Compliance EGM
Like the Correction Law, the Department's record of compliance EGM provides that in weighing past offenses - - whether criminal, civil or administrative - - the Department will also consider evidence put forward by an applicant or permittee that it "is rehabilitated and has re-established a reasonable record of compliance with the relevant laws." This also justifies development of a factual record concerning recent compliance by Al Turi and its principals, particularly with regard to environmental regulations and the terms of its current landfill permit.
Information about Al Turi's rehabilitation and recent compliance record is relevant to the permitting decision in this matter, though by no means is it determinative, as there are many fitness-related factors to be considered both under the Correction Law and the Department's record of compliance EGM. In fact, in my prior hearing report, I wrote that "because compliance with the law is expected in the first place, the reestablishment of a good compliance record should not, by itself, have too great an influence on the permitting decision, especially when considered against the nature, duration and overall seriousness of the crimes that were committed." (Hearing Report, page 34.)
It may well turn out that a consideration of events of the last three years does not alter my or the Commissioner's previous conclusion that Al Turi is unfit. But during the issues conference phase of the Department's permit hearing procedure, my job is only to identify those issues that require further pursuit, not to resolve those issues. It may be that Al Turi and Department Staff can stipulate to relevant facts, or that I can ascertain those facts from uncontested representations of their counsel. But to the extent it is necessary, a record will be developed based on the evidence that these two parties want the Commissioner to consider. That new evidence, in tandem with facts already established from the prior proceeding, can then be used a basis for briefing the fitness issue.
Apart from changed circumstances attributable to the passage of time, Al Turi points to another factor that I agree undermines the notion of identicality that would be required to apply collateral estoppel to the Commissioner's prior fitness determination. That concerns the different natures of the two permit applications: (1) the pending application, to continue to completion an existing permitted activity, with no material change in permit conditions or the scope of operations; and (2) the prior application, to construct and operate a significant expansion of that activity, with potentially more serious consequences for the environment if not handled properly. Al Turi argues that, even if it were determined unfit to expand the landfill, it might still be deemed fit to have its existing permit renewed. (Significantly, the Department never sought to revoke the existing permit after the Commissioner's 1999 decision addressing the expansion.) On the other hand, Department Staff argues that the duties of self-policing, accurate record keeping and honest self-reporting are the same regardless of the permit being held, so there is no meaningful distinction between Al Turi expanding the facility and merely completing work that has previously been authorized. This issue, concerning the different natures of the two applications, requires briefing though little in the way of further factual development, since, for comparison purposes, the expansion application documents may be retrieved from the record of the previous proceeding, along with the draft permit that Staff developed in relation to that application.
While collateral estoppel cannot properly be invoked in relation to the Commissioner's prior fitness determination, the bulk of the findings of fact in my prior hearing report, which the Commissioner relied on making his determination, may be carried over to this proceeding. As to these facts, Al Turi, being a party to the earlier proceeding, had a full and fair opportunity to litigate, and the facts remain relevant to the fitness issue. In the interests of judicial economy, Al Turi has expressed a willingness to accept certain of my previous findings for the purpose of resolving this matter too. However, most of those findings about its compliance history have already been admitted through Al Turi's record of compliance disclosure statement, which is a required supplement to the permit renewal application, so no stipulation is necessary.
The following findings from my prior hearing report shall be carried over to this proceeding and adopted in relation to the fitness issue:
- - Findings No. 1 through 15, concerning the criminal history of Al Turi landfill, its principals, and related companies, the continuing oversight of Al Turi by a court-appointed monitor as a result of these crimes, and a review of Al Turi's federal corporate income tax returns for the years 1989 through 1996. The criminal convictions resulted from the U.S. District Court matter United States v. Gigante, et. al., No. 96 Crim. 466 (S.D.N.Y.), and remain the principal basis for Staff's determination on fitness. Al Turi has acknowledged the crimes in its disclosure. The information about the tax returns is derived from an affidavit presented during the prior hearing.
- - Findings No. 16 through 19, concerning local justice courts' dispositions of three tickets involving Al Turi's alleged violation of environmental laws and regulations. Al Turi has acknowledged these matters in its disclosure.
- - Findings No. 20 through 31, concerning odor problems at the landfill between 1993 and 1998. These findings shall be supplemented by information from inspection reports for the period from 1998 forward, to verify whether an earlier odor nuisance condition has been eliminated, as Al Turi contends.
- - Findings No. 32 through 46, concerning a past breakout of leachate into the Wallkill River at the landfill site. These findings shall be supplemented by new information Al Turi says it has obtained, including what it describes as an extensive scientific analysis of the river demonstrating that it is not being measurably affected by the landfill.
- - Findings No. 47 and 50, concerning the environmental compliance record of Suburban Carting Corp., in which Thomas Milo, one of Al Turi's three principals, is the sole shareholder. (But not Findings No. 48 and 49, which concern incidents that, while relevant in the first proceeding, are no longer relevant since they now fall outside the 10-year window of review established by the Department's EGM. For the same reason, no weight shall be given to Findings No. 51 and 52, concerning other companies affiliated with Al Turi's principals.)
- - Finding No. 53, concerning Connecticut's denial of a solid waste transfer station permit to Champion Recycling Industries, which at the time was affiliated with Thomas Milo.
The remaining findings of fact in my prior hearing report concerned the need for an expansion of the Al Turi landfill. That issue is not relevant to the permit renewal, which contemplates only the completion of filling of previously permitted space, rather than opening new capacity at the facility. Also, during the prior proceeding, need for the landfill expansion was considered not in relation to Al Turi's fitness, but as a justification for entering a trust arrangement that was rejected by the Commissioner and is not part of the renewal application.
Because the fitness issue requires a fresh look in the context of the renewal application, no collateral estoppel effect shall be given to the discussion section of my prior hearing report, or to its conclusions and recommendations. Even so, the Department may take notice of the 1999 Commissioner's decision denying Al Turi permission to expand the landfill to the extent that the previous denial of a permit for the same or a substantially similar activity is, by itself, an event that the record of compliance EGM states should be considered as a basis for exercising the Department's discretion in denying a permit. [See EGM, pages 4 and 5.]
Offers of Proof By Citizens Who Care
Though Orange Environment relies on the facts established in the prior proceeding, Citizens Who Care offered to introduce new information on the conduct of Al Turi's principals since the 1999 decision, as well as previously unconsidered information that is alleged to link Al Turi's principals to environmental violations by other entities in which they have or had at the time a substantial interest.
These offers of proof are discussed below:
Compliance with Requests of Federal Monitor
Pursuant to the terms of their plea agreements in the Gigante proceeding, Al Turi and various of its corporate affiliates accepted the supervision of a court-appointed monitor for a period of five years from their sentencing on March 30, 1998. The federal court monitor is Walter Mack, a Manhattan attorney.
Under terms of a written agreement to which Al Turi is a party, Mr. Mack's job includes overseeing operations of Al Turi and its affiliates to ensure (1) that they comply with all federal, state and local laws, including environmental laws, and the terms of their sentences, and (2) that their assets are not improperly transferred, sold, dissipated or wasted. Citizens Who Care proposes to call Mr. Mack to testify, or in the alternative offer his reports as evidence of what it describes in its petition as "a pattern of noncompliance with the monitor's legitimate requests for information." This is not necessary since the issues of alleged procrastination and "stonewalling" of the federal monitor were addressed in the prior proceeding. In relation to those issues, I wrote in my prior hearing report that I was not willing to impugn Al Turi's fitness based on statements in the monitor's reports, since the criminal convictions speak much more loudly on the fitness issue, and there may have been legitimate reasons for delays in document production, as Al Turi argued at the time. [See Hearing Report, pages 45 and 46.]
Citizens Who Care also alleges that companies in which Al Turi's principals are or have been involved violated requirements of the monitor agreement that (1) the monitor's consent be given prior to sales of corporate assets, and (2) best efforts be undertaken to collect on past-due obligations. These matters will not be pursued because it is not the province of the Department to determine, in the first instance, whether Al Turi has met its obligations to the federal monitor. Though the Department has broad implied authority to look at circumstances relevant to the fitness of a permit applicant, the record of compliance EGM lays out the various events that the Department will in fact consider as basis for denying a permit, and the type of misconduct alleged by Citizens Who Care is not among the identified categories, as the group's counsel acknowledged at the conference. Citizens Who Care analogizes, as an indicator of fitness, noncompliance with the monitorship with noncompliance with a Department consent order; however, noncompliance with a Commissioner's order is specifically set out in the EGM as an event the agency will consider.
Alleged Negligent Oversight At Al Turi Affiliate
Citizens Who Care alleges in its petition that the federal monitor recently found a connection between negligent oversight by Suburban Carting Corp., owned at the time by Thomas Milo, and fraud committed against Suburban by Damon Roberts of On-Sight Trucking, Inc., an outside firm hired by Suburban to transport waste for disposal. Based on my review of the monitor's report, it should be stressed that the described fraud was against Suburban, not by Suburban, at a time when Mr. Milo was serving his prison sentence, as Al Turi's counsel argues. The monitor writes that the employees and/or managers of Suburban, which runs a transfer station in Mamaroneck, were, at best, negligent, and had they been more attentive and compliance-oriented, the company would not have been defrauded by Mr. Roberts, who, according to the monitor, used altered or phony invoices supported by altered or phony destination facility weight tickets. Citizens Who Care argues that the incident speaks poorly of Al Turi's ability to successfully police its landfill. However, the incident did not occur at the Al Turi landfill, and the best evidence of that landfill's oversight is its own compliance history. For those reasons, and because there is no evidence that Suburban was found guilty of any crime or other offense related to the incident, I will not pursue this matter further.
Alleged Illegal Disposal of Hazardous Waste by Al Turi Affiliate
In its petition for party status, Citizens Who Care alleged that Suburban Carting Corp. illegally transported and disposed of 15 to 20 drums of hazardous waste in 1995, and that the Department successfully addressed this in an enforcement action. In a post-conference submission, the group's counsel corrected his assertion to say the incident, which is alleged to have occurred in Westchester County, actually goes back to the mid-1980's. Because of this, the incident falls outside of the window for review established by the Department's EGM. However, to the extent that the incident was considered by the Connecticut Department of Environmental Protection as part of its fitness review of another Al Turi affiliate, Champion Recycling Industries, that agency's 1997 decision denying Champion a permit to construct and operate a solid waste transfer station in New Haven is already part of the record from the prior proceeding. [Hearing Report, Finding of Fact No. 53, page 21.]
Acmar Landfill Conspiracy
Citizens Who Care wants to bring into this proceeding a 1998 federal court case involving pollution growing out of an illegal conspiracy at the Acmar Regional Landfill in Alabama at a time, the group claims, that Thomas Milo was the sole investor in the landfill. Al Turi says Mr. Milo never owned any stock in the Acmar Landfill, nor did any other owner or officer of Al Turi, and the only contrary evidence Citizens Who Care could point to at the conference was a prosecutor's statement during sentencing of the landfill operator, Paul Burke, that "the primary investor in the Acmar Landfill" was "a man by the name of Milo." Mr. Milo was not charged in the Acmar matter, and Citizens Who Care has not adequately demonstrated that Acmar is in fact an Al Turi affiliate. Therefore, the Acmar case will not be pursued in this hearing.
Finally, Citizens Who Care proposes to offer a 1993 Federal Bureau of Investigation (FBI) agent's affidavit which it says details the direct involvement of Thomas Milo, a former owner of Suburban Carting Corp., in corrupt tampering with municipal contracts to transport solid waste from Alabama municipalities to the Acmar landfill. Among other things, the group claims, Suburban Carting paid for travel arrangements and entertainment in New York City for certain Alabama municipal officials, who were allegedly hosted by Mr. Milo.
Al Turi counsel objects to the affidavit on the basis that it is hearsay, asserting also that the agent's claims never resulted in any indictment or other charge against it or its three principals. In the absence of a conviction of some type stemming from the alleged illegal conduct, there is no basis under the Department's record of compliance EGM to pursue this matter further.
The offers of additional proof made by Citizens Who Care to supplement the Department's fitness inquiry in this matter are rejected, and the claims of wrongdoing based on those offers will not be pursued. The only new evidence that will be considered on the fitness question shall be that presented by Al Turi and Department Staff.
Issue No. 2: Potential Violation of Special Permit Condition
An issue exists as to whether renewal of the existing permit would result in violation of that permit's special condition No. 52 authorizing extension and renewal of the permit "provided that the waste disposal will occur only over double composite lined areas of the landfill." [See page 15 of the existing permit for the full text of the permit condition.] This issue concerns only the Department Staff and Al Turi, the prospective intervenors not having referenced it in their petitions.
Al Turi argues that the renewal application is consistent with special condition No. 52 because the areas in which continued landfilling would occur are underlain directly by either (1) double composite baseliners or (2) composite interim cover liners that direct collected leachate to the areas where a double composite baseliner exists. According to Al Turi, the composite interim liner systems were installed over certain operational portions of the landfill not underlain by a double-composite liner system and having remaining disposal capacity. Al Turi says the interim cover liners provide a barrier to precipitation and leachate through the underlying refuse and, by virtue of their slope, direct all leachate to baseliner areas constructed with a double-composite system. Al Turi reasons that because the entire area proposed for continued landfilling is ultimately serviced by a double composite baseliner system, whether or not most of the area is directly over such a system, compliance with special condition No. 52 is assured.
To illustrate this issue, a line was drawn around the "operational area" on an application map (Exhibit No.8) titled "Existing Site Conditions," the area being where operations have been conducted under the permit term now ending and where they would continue under any renewal. There is final cover in all other areas of the landfill, but in the operational area there is only a daily or intermediate cover on top of the deposited waste. The "operational area" is 7.4 acres in size, but according to Department Staff, only 0.3 acres of that area is directly over a double composite liner. According to Staff, further landfilling limited to this 0.3-acre area (a long narrow rectangle located on the southern extent of the operational area, on sloped portions of Areas 12 and 13 as shown on the map) would be impractical, if not impossible, and even Al Turi conceded it would be very difficult because of the slope.
Adjudicating the issue of compliance with special condition No. 52 requires a clear understanding of what the condition mandates. Does it mean that waste disposal can occur only in areas directly on top of a double composite liner, as Department Staff argues, or, as Al Turi argues, can waste also be deposited in areas that, through the diversion of leachate due to the interim liner system, are served by a double composite liner? Also, is it intended that the double composite liner meet the specifications of 6 NYCRR 360-2.12(f)(4), since that section is not specifically referenced in the condition itself?
Because the condition is somewhat ambiguous, evidence of the parties' intent and understanding when it was inserted in the permit five years ago, if such evidence exists, would be helpful. It would also be helpful to understand the extra environmental benefit that the condition is meant to accomplish, since what the Department aims to prohibit under the renewal is something that it has allowed to date. Testimony on this point may come from engineers for Department Staff and Al Turi. (Al Turi's project manager, Prentiss A. Shaw, an engineer, spoke briefly at the conference about this issue.) Al Turi maintains that what it has in place is technically equivalent to a double composite liner directly underneath the entire operational area, and as environmentally safe. If that turns out to be true, there might even be a basis for eliminating the condition from a renewal permit, assuming the condition means what Staff says it does. As an alternative, Al Turi has proposed requesting some kind of variance or determination that its liner system is equivalent to what the Department could otherwise require.
Issue No. 3: Environmental Impact of Diminished Operation
Finally, an issue exists concerning the environmental impact of Al Turi continuing to operate at the diminished level of waste receipt anticipated in its permit renewal application. Al Turi anticipates accepting waste at the rate of 50 to 250 tons per week, while maintaining the existing special permit condition No. 26 allowing it to accept up to 8,400 tons per week. (There is no minimum amount of waste the facility is required to take in to continue operations.)
The renewal application projects that the entire 7.4-acre operational area would reach final grade in between 3 to 14 years based on a December 2001 topographic survey and the assumed incoming waste rate of between 50 and 250 tons per week. Department Staff claim that such a low rate of waste receipt makes the landfill a "sham" operation that has just about reached full capacity already. (Staff represented at the issues conference that the landfill may have only 6,000 to 7,000 tons of capacity left.) Staff also claim that the landfill's annual reports show it has been operating at a very low level for almost three years.
According to Department Staff, continued operations of the landfill at such a low level would result in an environmentally unacceptable delay in placement of final cover. Staff says that final cover placement is the last and most important step in mitigating potential environmental impacts associated with solid waste disposal, in particular by minimizing the generation of leachate and preventing the uncontrolled release of gases. Staff estimates that it takes only two to ten long-haul truck loads to account for 50 to 250 tons of waste.
Al Turi has apparently reduced its operations in anticipation of one of two possibilities: (1) that the Court of Appeals overturns the Department's decision to deny its application to expand the landfill; or (2) that another entity deemed fit by the Department can secure its approval to conduct the expansion instead. In regard to the latter, an application was made by Superior Hudson Valley Landfill, Inc. to carry out the expansion. However, according to Department Staff, that application was deemed incomplete last year and is not actively being pursued. In requesting a hearing on Staff's notice of intent to deny, Al Turi requested that the Department consider granting a renewal for a shorter period of time than is customary, until the Superior application reaches a final determination.
The issue of the environmental impacts of delaying final cover can be addressed by expert testimony from Department Staff, with an opportunity for Al Turi to challenge Staff's assertions. Al Turi says it is prepared to prove at the hearing through numerous unchallenged scientific studies, including one of the Wallkill River, that the landfill is having no significant impact on human health or the environment. It says there is evidence it can present that groundwater quality is improving at the site, and that less leachate is being generated.
Assuming Staff is correct about the environmental impacts of the landfill's continued operation, possible outcomes of the adjudication could include denial of the renewal permit, granting a short-term renewal of the permit with a fixed date for waste acceptance to cease, or setting a minimum level for waste receipt that the facility would have to maintain in order to continue operating. (Al Turi maintains that, as a practical matter, it lacks the manpower and equipment to handle 8,400 tons per week, but some lower level could be set to hasten the end of landfilling and the closure of the facility.) As a matter of fact, the existing permit allows the Department to modify special permit condition No. 26 at any time "to ensure proper operation of the facility," though no such modification has been sought, and the Department apparently does not have a practice of fixing minimum amounts for waste receipt.
RULINGS ON PARTY STATUS
Pursuant to the Part 624 regulations, Al Turi (as the permit applicant) and Department Staff are automatically considered parties to the adjudication of the issues outlined above. Participation by Orange Environment and Citizens Who Care depends on whether they have adequately met the requirements for the amicus status they are both seeking. Apart from filing an acceptable petition, a filer for amicus status must identify a legal or policy issue which needs to be resolved by the hearing, have a sufficient interest in the resolution of that issue, and through expertise, special knowledge or unique perspective be able to contribute materially to the record on that issue. [6 NYCRR 624.5(d)(2).]
I find that both Orange Environment and Citizens Who Care have met the requirements for amicus status and should be allowed to participate in the limited manner afforded by such status.
Orange Environment was instrumental in developing the issue of Al Turi's environmental compliance record at the prior hearing I conducted, and would be in a good position to argue the weight to be given Al Turi's recent environmental compliance record in relation to the record confirmed by prior hearing report. As explained in its petition (Exhibit No. 14), Orange Environment is a not-for-profit environmental advocacy and research group with about 2000 members in Orange County. Since its inception in the early 1980's it has particularly focused on landfill and waste disposal issues, including filing legal actions against the Orange County Landfill and the Al Turi Landfill. It has also been involved in Department permitting hearings for both landfills in the past. Orange Environment is especially concerned with the environmental impacts of landfilling along the Wallkill River.
Orange Environment can be helpful in arguing the issues of fitness and the alleged environmental hazard that has been created by the landfill's diminished operations. While, as an amicus, Orange Environment would not have the right to cross-examine witnesses for Al Turi, the group may also be helpful in assisting Department Staff to evaluate any new information Al Turi intends to present with regard to Al Turi's allegation that the landfill is having no significant impact on human health or the environment. Orange Environment also would like to argue the issue of need for the landfill; however, because the landfill is so close to its permitted capacity, need is not an issue here, unlike in the previous permitting matter, where the need for the new space afforded by the landfill's expansion was considered as a possible reason for approving the expansion. Also, Al Turi is not seeking to make need a factor in favor of permit renewal.
Citizens Who Care was formed in 2000, after the hearing on Al Turi's expansion application, and describes itself as a not-for-profit environmental organization and membership corporation that includes a number of Goshen residents who live near the landfill, work and travel near the landfill, and use recreational opportunities afforded by the Wallkill River. Citizens Who Care argues that it best represents the interests of Goshen residents in this proceeding, since town officials are not participating. [According to a letter of Honey Bernstein, the town supervisor, addressed to the group's counsel (Exhibit No. 23), the Town is not participating because it does not wish to compromise or prejudice its position in any way with regard to pending tax proceedings that have been brought against the Town by the Al Turi.]
As a non-elected, non-governmental group, Citizens Who Care is not able to act in the place of town officials as spokespeople for the local community; however, like Orange Environment, the group has established an adequate environmental interest of its own sufficient to be granted amicus status. The offers of additional proof that Citizens Who Care has proposed presenting make it appear that the group is actually seeking full party status; however, as noted above, I consider these offers inadequate and will not be pursuing the matters raised in them at the adjudicatory hearing. A grant of amicus status will allow Citizens Who Care to join Orange Environment in briefing the fitness issue, on which I think both groups can make a valuable contribution.
A party with amicus status has the right to file a brief and, at my discretion, to present oral argument on identified hearing issues. However, it does not have the other rights of participation or submission that are afforded full parties, such as the right to present evidence and to cross-examine witnesses for the other parties. [See 6 NYCRR 624.5(e).] To the extent that Orange Environment and Citizens Who Care want to be involved in the development of the evidentiary record, they should do so by offering assistance to Department Staff. Any stipulations on facts bearing on the issues outlined in this ruling shall require the consent of Al Turi and Department Staff only.
APPEALS OF RULINGS
A ruling of the administrative law judge to include or exclude any issue for adjudication, a ruling on the merits of any legal issue made as part of an issues ruling, or a ruling affecting party status may be appealed to the Commissioner on an expedited basis [6 NYCRR 624.8(d)(2)]. Ordinarily, expedited appeals must be filed to the Commissioner in writing within five days of the disputed ruling [6 NYCRR 624.6(e)(1)].
Allowing extra time due to the length of these rulings, any appeals must be received at the office of Commissioner Erin M. Crotty, 625 Broadway, Albany, New York, 12233, no later than 4 p.m. on October 8, 2002. Any responses to any appeals must be received before 4 p.m. on October 22, 2002. The appeals and responses mailed to the Commissioner's office must include an original and two copies. In addition, one copy of all appeal and response papers must be sent to me and all others on the service list at the same time and in the same manner as the papers are sent to the Commissioner. Service of any appeal or response thereto by facsimile transmission (FAX) is not permitted and any such service will not be accepted.
Appeals should address my rulings directly, rather than merely restate a party's contentions. To the extent practicable, papers should include citations to transcript pages and exhibit numbers.
Administrative Law Judge
Albany, New York
September 23, 2002
TO: Attached Service List